NEW LBP REPORT: Fund diversions erode Louisiana’s safety net

Posted on August 19, 2016

BATON ROUGE – In the two decades since the federal government overhauled America’s welfare system, Louisiana has steadily diverted money meant to help struggling families gain economic security. Welfare dollars made available through the Temporary Assistance for Needy Families (TANF) block grant have been used to plug holes in the state budget caused by large tax cuts – leaving fewer Louisiana families with the safety-net resources they need.

A new report by Grace Reinke of the Louisiana Budget Project, “TANF at 20: Failing Louisiana’s Poor,” details how the state has used its welfare dollars in the 20 years since Congress transformed America’s traditional welfare system into an annual block grant. The results have been dramatic: Cash assistance caseloads have plunged, even though Louisiana’s poverty rate hasn’t budged.

As of fiscal year 2015, only 11 percent of Louisiana’s welfare dollars were being spent on the three core goals of the welfare law – cash assistance, subsidized child care assistance and programs that help connect needy parents to work. The average state spends half of its welfare dollars on such programs.

“Instead of using TANF as a safety net for its most vulnerable families, as it was intended, Louisiana has all too often used this money as a slush fund to plug holes in other parts of the budget,” LBP Director Jan Moller said. “While many of the programs that TANF supports are certainly worthy, they should be funded with state dollars so that more of the block grant dollars are used for their intended purpose.”

Aug. 22 marks the 20th anniversary of the Personal Responsibility and Work Opportunity Reconciliation Act. To read the full report, click here.